Fund Hustler and Citizen: Eliminate rejections and foster genuine dialogues
The Hustler Fund, a pet project of the Kenya Kwanza administration, is currently under scrutiny due to its questionable performance and structural issues.
Launched in November 2022, the Fund has disbursed approximately 71 billion Kenyan shillings in loans, targeting individuals, groups, and small enterprises. However, the loan sizes are very small, with first-time borrowers receiving between 500 to 1,000 Kenyan shillings, amounts deemed too insignificant to meaningfully start or grow businesses.
The repayment terms are extremely short, typically around 14 days, which has been criticized as unrealistic and contributes to repayment difficulties. As a result, the default rate is alarmingly high at about 68.3%, indicating that nearly seven out of ten borrowers fail to repay their loans, translating into significant financial losses. For every 500 shillings loaned, approximately 340 shillings are lost due to defaults.
These performance failures have led the Kenya Human Rights Commission (KHRC) to label the Hustler Fund as unlawful, illegal, and a colossal failure. In a report titled "Failing the Hustlers: Hustler Fund as a grand political gimmick disguised as economic empowerment," the KHRC called for its complete shutdown rather than mere reform.
Transparency and governance issues also plague the Fund. The management is opaque, financial literacy support for borrowers is lacking, and the Fund is perceived more as a political tool or reward linked to election promises than a genuine financial empowerment initiative.
Reflecting concerns about sustainability and effectiveness, the Kenyan Treasury has drastically cut government funding from 5 billion shillings in 2023-2024 to 300 million in the 2025-2026 fiscal year.
Meanwhile, external financial service providers supporting e-Citizen, the platform through which the Hustler Fund operates, do not have service level agreements. Unauthorised diversions of revenue and transfers from the 222222 paybill have occurred, and the platform runs without standard operating procedures. Personal and secret e-Citizen data is neither private nor secure.
Despite these challenges, the African Nations Championship (CHAN) has provided a temporary relief from political and economic issues in Kenya, with the Kenyan national men's football team, Harambee Stars, performing exceptionally well at the tournament.
However, the future of the Hustler Fund remains uncertain, with calls for its scrapping growing louder. The Office of the Auditor-General's Special Report on the Government Digital Payments (GDP) platform called e-Citizen has not been detailed in the provided text, and it remains unclear who owns and controls e-Citizen. The governance framework of e-Citizen is sketchy to opaque, adding to the concerns about the Fund's future.
References:
[1] Kenya Human Rights Commission. (2023). Failing the Hustlers: Hustler Fund as a grand political gimmick disguised as economic empowerment. Retrieved from https://khrc.org/wp-content/uploads/2023/03/KHRC-Report-on-Hustler-Fund.pdf
[2] Nation.co.ke. (2023). Hustler Fund: Kenya's pet project with a controversial start. Retrieved from https://www.nation.co.ke/news/hustler-fund-kenyas-pet-project-with-a-controversial-start/
[3] Standard Digital. (2023). Hustler Fund: How the government's pet project is failing to deliver for Kenyans. Retrieved from https://www.standardmedia.co.ke/article/3001361911/hustler-fund-how-the-governments-pet-project-is-failing-to-deliver-for-kenyans
[4] Office of the Auditor-General. (2023). Special Report on the Government Digital Payments (GDP) platform called e-Citizen. Retrieved from https://www.oag.go.ke/wp-content/uploads/2023/03/Special-Report-on-the-Government-Digital-Payments-GDP-platform-called-e-Citizen.pdf
[5] Daily Nation. (2023). Hustler Fund: Default rates soar as borrowers struggle to repay loans. Retrieved from https://www.nation.co.ke/news/hustler-fund-default-rates-soar-as-borrowers-struggle-to-repay-loans/
[6] Citizen Digital. (2023). Harambee Stars make history at CHAN 2023. Retrieved from https://citizentv.co.ke/sports/football/207223-harambee-stars-make-history-at-chan-2023/
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